Retail media, measurement evolution, and the changing economics of advertising

At this year’s Performance Marketing World, industry leaders delivered a clear message: the media landscape is changing rapidly, and not necessarily in ways that benefit advertisers. Three dominant themes emerged across the sessions:

• Retail media is booming, but it benefits media owners more than advertisers.
• Attribution models remain flawed, with a growing need for triangulated measurement approaches.
• Advertising costs are rising, forcing brands to rethink investment strategies.

With insights from Dr Grace Kite, Les Binet, and Eric Seufert, the discussion focused on how brands can avoid costly mistakes and adapt to the shifting economics of digital advertising.

Retail Media: A Profitable Model—But for Who?

Dr Grace Kite: Retail Media is a One-Sided Transaction

Retail media is experiencing rapid growth, but Dr Grace Kite challenged the idea that it is driving true business growth for advertisers. Her analysis suggests that retail media is not adding incremental sales—it is simply shifting costs from one place to another.

The Hard Numbers Behind the Retail Media Boom:

• 50% of all product searches online now go through Amazon.
• 70% of Amazon’s top search results are now paid ads.
• 50% of Amazon sellers’ revenue goes directly to Amazon.

This trend is not limited to Amazon. Platforms like Deliveroo and AutoTrader are following a similar model:

• A leading food brand now spends millions on Deliveroo ads—for placements they previously received for free.
• AutoTrader controls 75% of UK car search time, making it an unavoidable cost for dealerships.

These findings raise a critical question: Is retail media a true driver of growth, or just an expensive necessity?

Kite argued that brands are increasingly paying rent just to maintain their position in the digital landscape, rather than gaining incremental sales.

The Measurement Crisis: Why Attribution is Still Broken

Les Binet: Moving Beyond Performance Attribution

Les Binet’s keynote reinforced a point that many marketers have long suspected: most attribution models fail to measure the true impact of advertising.

The Key Problems with Existing Attribution Models:

1. Last-click measurement is fundamentally flawed. It prioritises short-term conversions while ignoring long-term brand impact.
2. Retail media’s effectiveness is overstated. Studies show that attribution models overestimate the impact of high-intent search ads by 3x.
3. Performance-only strategies create diminishing returns. When brands over-invest in lower-funnel tactics, they saturate audiences and exhaust their customer base.

The Future of Measurement: Triangulation:

Binet argued that brands must adopt a more holistic measurement approach, combining:

• Marketing Mix Modelling (MMM) to assess long-term media impact.
• Multi-Touch Attribution (MTA) to optimise digital performance.
• Geo Hold-Out Testing to validate true incrementality.

At Smithfield, we apply this approach through AI-driven attribution models, ensuring our clients measure real business impact rather than misleading proxy metrics.

The Role of Brand and Creative in Performance Marketing

The Shift from Mass-Reach TV to Multi-Touch Digital

The fragmentation of media consumption means that traditional brand-building strategies must adapt. However, brand investment remains critical to long-term growth.

Key Shifts in Media Strategy:

1. High-attention, high-impact formats continue to drive superior ROI.
2. Social and search advertising budgets are increasing, but attention spans are shrinking.
3. Advertisers must balance immediate conversions with long-term brand-building efforts.

The Smithfield Take: What This Means for Brands

The key message from Performance Marketing World is clear:

1. Retail media is not a guaranteed growth driver. Brands must evaluate whether their investment is truly delivering incremental sales or simply maintaining their position.
2. Measurement must evolve. Linear attribution remains flawed, and brands must embrace advanced analytics and triangulated measurement approaches to get a full picture of performance.
3. The cost of advertising is increasing. Brands that rely on short-term performance tactics alone will face diminishing returns unless they integrate long-term brand-building strategies.

At Smithfield, we help brands build sustainable media strategies that prioritise effectiveness, brand strength, and long-term commercial growth.

If your marketing strategy is focused solely on maintaining visibility rather than driving real growth, it is time for a rethink.

Read more on our latest insights & speak to our team today.